Lockheed Martin has issued a termination notice for the Jabiru-1 satellite it is building for Australia’s NewSat over US$21m in overdue payments.
NewSat said it did not pay the US manufacturer because it is still locked out of its project financing…
Lockheed Martin has issued a termination notice for the Jabiru-1 satellite it is building for Australia’s NewSat over US$21m in overdue payments.
NewSat said it did not pay the US manufacturer because it is still locked out of its project financing facilities after allegedly breaching their terms last year. It has been busy meeting conditions tied to a waiver, which included the appointment of three independent directors, but today said it expects to need additional equity to resume the debt financing.
The operator said it has received conditional proposals to invest or underwrite up to “$60m” in equity, which have been put to lenders of its export credit agency-backed financing.
However, recent discussions with the US Ex-Im Bank and Coface have primarily focused on Jabiru-1’s potential to miss its Q1 2016 launch window with France-based Arianespace.
In a stock exchange filing today, NewSat said Lockheed was confident of delivering Jabiru-1 on time if a mutually agreeable resolution for its missed payments can be reached “shortly”.
It said: “Now that Lockheed Martin has issued a termination notice, there is an extended cure period during which the default may be remedied.
“NewSat understands that Lockheed Martin is continuing with construction of the satellite at this time … NewSat is confident that if debt funding recommences and payment is made to Lockheed Martin shortly, construction of the satellite by Lockheed Martin will not slow down or be stopped, with the delivery of Jabiru-1 expected on schedule for the current launch window (March to May 2016).”
A NewSat spokesperson declined to comment further.
NewSat had to seek a waiver to its Jabiru-1 project financing facilities after it allegedly breached the covenants of the debt when it borrowed a US$10m unsecured short term loan in June 2014 from its shareholder Ever Tycoon.
Ever Tycoon is a related party of NewSat director and shareholder Ching Chiat Kwong, and part of the new equity raise is intended to repay the loan.
Expands orbital slot deal with Kyprosat
NewSat announced last week that it had expanded on a deal originally secured in 2011 for eight orbital slots from Kypros Satellites, the Cyprus-based space asset manager.
The new arrangement gives the operator access to increased spectrum at each location, eliminates activation fees for some of the filings, and enables it to tap Kyprosat’s wider pool of 20 locations in total. It also enables the group to exchange the slots if required.
NewSat CTO David Ball said: “This important agreement protects NewSat against the expiry of orbital slot filings and provides significant flexibility in pursing business opportunities for the orbital placement of future Jabiru satellites.”
NewSat has its sights set on becoming a global satellite operator after growing from a solutions provider into a teleport operator. Its Jabiru-2 payload on the Measat-3b satellite launched commercial services in November 2014.
